JOHANNESBURG (miningweekly.com) – South Africa’s power utility Eskom has undertaken to supply power to Great Basin Gold’s (GBG’s) Burnstone mine in the Mpumalanga province, the Toronto- and Johannesburg-listed company said on Monday.

GBG has accepted an R119-million official budget quotation for a new supply of power to the Burnstone mine. This quotation outlines the project for the supply of power to the mine, which was planned to be completed in time for the commissioning of the metallurgical process plant that was currently under construction.

GBG is developing a shallow, long-life mine at a cost of R2-billion over the 19-year life-of-mine for the project.

GBG reported that Eskom’s support to Burnstone was of strategic importance to allow the project to be developed to its planned production levels.

In combination with the approval of the Burnstone mining right and environmental management programme in October, the project now has the key elements in place for development, the company said in a statement.

“Securing sufficient permanent power supply to the Burnstone mine has been an ongoing concern to the company and its investors,” said CEO Ferdi Dippennaar.

“In addition to the supply to the mine, Eskom has planned to upgrade the regional infrastructure, which will bring economic development and wealth to a community with high levels of poverty and unemployment.”

GBG reported that the Eskom 2008 announcement, outlining a backlog in keeping up with the national power demand, and its subsequent drastic power conservation scheme came at the time when the Burnstone project had entered mid-stage construction.

Eskom pledged support to the project after GBG engaged with the utility on the matter as part of its risk-mitigation strategy. The utility committed to Burnstone’s phased power demand requirements, subject to the terms of the budget quotation, which involve the refurbishment of an existing line, and construction of a new section of a power line to Burnstone.

This process is jointly managed by the two companies to coincide with project completion.